Beat the stamp duty sting

A carefully planned renovation can be a successful alternative to selling and moving

- Pam Walkley

Pam Walkley REAL ESTATE

While housing affordability is a huge problem for those trying to buy their first home, deciding whether to renovate or move can also be a headache for people living in homes that are either too small or poorly configured for their needs.

The incredibly high cost of stamp duty in this country is one of the big inhibitors to moving house. It also adds significantly to the housing affordability problem.

Stamp duty, or transfer duty, is one of the most significant upfront costs associated with purchasing property outside of saving the deposit, says Alex Ritchie, personal finance editor at RateCity. “And unlike lenders mortgage insurance, which can be added to the loan itself, stamp duty must be paid upfront.”

Crunching the numbers based on CoreLogic median prices at March 1, 2022, RateCity found a median-priced house price in Sydney ($1,116,219) would attract stamp duty of $46,272. In Melbourne, a median-priced home ($799,756) would require a stamp duty payment of $43,055. Stamp duty on median-priced homes in other capital cities varies from $18,363 to $31,605.

In March, findings of the House of Representatives standing committee on tax and revenue suggested the states should ditch stamp duty and potentially replace it with a broad-based land tax.